Magazine Article | October 1, 2000

Here Come The Big Boys

Source: Field Technologies Magazine

Many high-end vendors see plenty of opportunity (read: dollar signs) in the midmarket. If your company is in this demographic, you have more power than you might have imagined.

Integrated Solutions, October 2000

Having traveled the industry trade show trail, I'm always amazed by the number of vendors that claim their target customers are Fortune 100 or Fortune 500 businesses. That market demographic sounds impressive, but the number of potential customers is pretty finite. To keep their companies growing, vendors have to eventually reach beyond this upper echelon – actually, below this upper echelon – to midmarket businesses. And, that's exactly what's happening.

Are You Part Of The Midmarket?
Is your company part of the midmarket? Well, it all depends on which definition of midmarket you are using. Generally speaking, midmarket companies have annual revenue between $200 million and $1 billion. Some vendors, however, will extend that bottom revenue figure down to $100 million or even $50 million. The total number of employees is another metric used to determine midmarket companies. If your company has between 100 and 1,000 employees, it would typically be considered a midmarket business. Of course, these are just general parameters. Your mileage may vary.

Vendors that have long targeted high-end customers are now salivating when they look at potential technology sales to the midmarket. They now realize that the midmarket is not just a large pool of mom-and-pop businesses. These are multimillion-dollar companies with hundreds of employees and complex enterprises. These companies realize that technology is a business enabler – not just a necessary evil of doing business. For the most part, these descriptions fit your company.

Midmarket: Big Money, Big Growth
The IBM/Siebel Systems alliance is just the latest announcement from a host of technology vendors that are now focusing attention on the needs of customers in the midmarket. A while back, I participated in a conference call where representatives from IBM and Siebel Systems detailed what their partnership could bring to the midmarket. The message was similar to many I had heard before. It included the mantra that the midmarket is begging for sophisticated solutions, the midmarket is wholly under-served by its current crop of vendors, and the midmarket is moving quickly toward implementing solutions that will facilitate e-business. What caught my attention were some of the numbers that IBM and Siebel Systems were using to justify bringing CRM (customer relationship management) solutions to the midmarket. Mark Ryan, vice president, marketing, IBM Global Midmarket Business, explained that the midmarket represents $135 billion in technology expenditures each year, and that number is growing at approximately 12% each year. He added that this growth is "much faster" than IBM's large enterprise market. The midmarket opportunity for CRM solutions is equally impressive. "We believe CRM solutions for the midmarket represent an approximately $10 billion market that is growing at roughly 23% a year," said Ryan.

Exercise Your Power
That Siebel Systems solutions will be marketed and sold through IBM's 90,000 worldwide business partners, should not be lost on midmarket companies. (This is a big initiative.) You know if you're a midmarket company. And, you should also know that you have power. Feel free to exercise that power and flex a little muscle. Your company may not be huge, but it is part of an enormous market.

A high-end solution may be just what your company needs, but don't be seduced only by the names of the players in the deal. While large high-end vendors are rushing to the midmarket, there are plenty of vendors that have served this niche for years. Don't forget these types of vendors as the number of solution providers knocking on your door increases dramatically. Ultimately, it's your money and your decision.

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